SEC Ruling on Carbon Emissions: A Significant Shift for Contractors

May 31, 2022 Tonia Hoy

Over the past couple of years there has been a heightened awareness of climate change and a renewed focus on all facets of society contributing to sustainability measures. As investors in particular have shown an interest, the Securities and Exchange Commission has taken a more vocal role in the Sustainability discussion. The SEC’s draft rule, The Enhancement and Standardization of Climate-Related Disclosures for Investors (File# S7-10-22) would require publicly traded companies to disclose carbon-related risks to their business along with more extensive information about their company’s carbon emissions. As more companies disclose their carbon footprints, they will face increasing pressure from the investment community and other stakeholders to establish carbon reduction targets and a plan on how they will reach those targets in the future.  

My belief is that the impact of the SEC’s rule will not remain contained to publicly traded companies. Suppliers and contractors to those companies will also come under pressure to help their public customers with their reporting and with their reduction commitments, and thus will be incentivized to set their own carbon emission reduction goals. In addition, the language of sustainability initiatives in these public companies’ ecosystems will shift focus from energy savings to carbon emissions.  To prepare for this transition Acuity Brands has created a landing page around sustainability that provides a detailed infographic around scope 1, 2, and 3 carbon emissions. A brief overview is outlined below:

  • Scope 1 emissions are direct emissions (emissions associated by fuel combustion in boilers, furnaces, and vehicles)
  • Scope 2 emissions are indirect emissions associated with the generation of purchased energy for the company’s facilities (electricity, steam, heat and/or cooling)
  • Scope 3 emissions are all other emissions from a company that occur upstream and downstream and can become very complex quickly

Lighting still has an important role to play in helping companies throughout the country reach their carbon emission reduction goals. In 2018, 68% of U.S. commercial buildings still used fluorescent standard lamps to meet some or all their lighting needs, according to the U.S Energy Information Administration. As an industry we need to continue to help educate companies that there is a more energy efficient option that makes financial sense today. Acuity Brands offers solutions on the cutting edge of technology and sustainability that can and should be maximized. The combination of energy efficient LED fixtures, Controls, and the ECLYPSE offers contractors a networked lighting control solution that is integral to saving money on energy costs while also reducing the impact on the environment; thus reducing the carbon emission footprint, now and moving forward.

Measurement and verification (M&V) technologies will also become critical in helping companies understand where they currently stand on their sustainability path and demonstrating to investors that they are in fact reaching their targets as outlined in their sustainability plans. In the past M&V technologies were either not cost effective or were too cumbersome for most facilities to understand how to use them. However, there have been huge advancements in the technology to make them more cost effective and easier to understand and deploy across a company’s portfolio. An example of this advancement is Acuity Brands’ Atrius Building Insights solution that helps companies automatically collect, measure, track and visualize their buildings’ and portfolio’s utility consumption, spend and emissions. The platform is being expanded now to allow users to track and report their full carbon footprint, which has already been identified as a significant obstacle to implementing the SEC’s new rule.

We want to partner with contractors to help you become more profitable, more energy efficient, less carbon intensive, and win more business. Please visit our wide range of sustainable products and services on our website. Also, to stay current on the latest product news and industry information, please sign up for our monthly Contractor Corner newsletter today. Looking forward to continuing help grow your business!

David Errigo, Director of Renovation Sales

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